Several Legacy Liens Are Settled
Last updated Monday, June 9, 2008 3:23 PM CDT in Business
By Kim Souza
THE MORNING NEWS
Lawyers have negotiated settlement terms between Legacy Building developers Brandon Barber and Seth Kaffka and at least five of the conflicting parties just a little more than a month before a scheduled trial date.
With nearly half of the interested parties settling claims prior to the July 23 trial date, the case may be remedied sooner than expected.
In recent days the lead plaintiff in the foreclosure suit, EWI Inc. doing business as RGC Glass, settled with Lynnkohn -- the business operated by Barber and Kaffka -- for an undisclosed amount, according to court filings.
In September, EWI was the first creditor to file suit against Lynnkohn for claims totaling $124,604 for contract work on the Legacy condominiums for which it had not been compensated.
John Scott, legal council for EWI, said Thursday the parties reached a confidential settlement and filed motions for dismissal in Washington County Circuit Court last Wednesday.
Scott said his client will not pursue actions against Lynnkohn at the upcoming trial. He said the parties who have settled, did so directly with Lynnkohn and did not involve the court appointed receiver Wayne Swofford.
Two other parties filed Friday similar motions for dismissal with the court. Tom Keck, doing business as War Eagle Welding, and Blair Electric reached confidential settlements with Lynnkohn in recent days.
Attorneys for Blair petitioned the court in April for motion to intervene in the suit. They asked for a lien judgment totaling $238,000 for unpaid contract services and completed and interest on the Legacy Building.
Judge William A. Storey granted Blair Electric the right to intervene, which was one of the reasons Storey postponed the court date from April 15 to June 23.
During an April 15 hearing, Storey summoned all representing lawyers in the Legacy Building foreclosure suit to streamline their complaints and plan for a 3-day trial in July to sort out the entangled litigation that involved a dozen or more parties suing not only Lynnkohn, but counter-suing one another for preferential pecking order in the payment line.
Attorneys for Blair and Keck confirmed confidential settlements with Lynnkohn have been reached and both parties have amicably resolved their claims with Lynnkohn and all other related parties in the suit.
Johnson Mechanical Contractors Inc. and Harness Roofing Inc., also co-defendants in the ongoing foreclosure suit, on May 30 said they settled outstanding claims with Lynnkohn.
According to recent court filings, the two parties held combined judgments against Lynnkohn totaling more than $500,000. Attorneys for Lynnkohn asked the court in April to deny the judgments and dismiss the parties' intrusion into the ongoing suit as they waited until 20 days before the trial date to file their motion.
Storey allowed the parties to join the suit, but recent filings indicate they reached an undisclosed settlement and will not be present at the July trial should it occur.
Despite the recent flurry of settlements there are still a few parties moving forward. National Home Centers still holds a claim for $153,232, and Lasco Acoustic and Drywall's judgment totals $473,752. There is no evidence that either of these parties have settled.
Legacy National Bank holds the largest interest in the Legacy Building having loaned Lynnkohn $16.7 million for the construction of the upscale condominium project in downtown Fayetteville.
Legacy Bank participated the loan out to First National Bank of Fort Smith, Little Rock-based Metropolitan National Bank and First National Bank of Green Forest. The amounts of participation have not been made public in the court filings.
Having foreclosed on two loans to Lynnkohn in December, Legacy National Bank was owed $18.16 million at that time.
Marshall Ney, legal council for Legacy National Bank, was not available for comment.
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